Let’s cut to the chase. The parental guilt is in overdrive right now as we quickly approach the holiday season. After all, the coronavirus has taken so much from us this year, and our kids have endured so many changes, including remote learning, their favorite activities being canceled, and their parents’ job changes. We want to make sure our kids have a magical holiday season despite the virus looming over us.
Here’s the thing, overspending on our kids this year isn’t a good idea. (Yes, I said it.) In fact, draining our bank accounts can have long-term, dire consequences that do far more future harm than current good. If you’re among the parents who are trying to do more for your kids this Christmas, you aren’t alone. Already in the social media mommy groups I’m in, parents are asking questions such as, “My kid has everything. Any ideas for a six-year-old for Christmas?” I’ve seen several moms pose the question: what is a realistic holiday budget per child? The common vibe is that parents feel like they must spend money on their kids this year, more than ever, because 2020 is a dumpster fire.
According to a recent shopping survey by NextAdvisor, “parents with children under 18 are more than twice as likely to (23%) to feel the pressure to overspend this holiday than parents with adult children (10%) and non-parents (15%).” And get this, parents. We aren’t alone! The same survey showed that younger adults (18-34) may spend more this year than older adults, “with 28% saying they feel the extra pressure, compared to just 10% of those 35 and older.” Whew!
Farnoosh Torabi, contributing editor to NextAdvisor and host of the award-winning podcast “So Money,” spoke to Scary Mommy about ways to avoid some serious financial mistakes this holiday season. She’s been a money guru for over twenty years, and she gets the parental pressures we’re facing. Ms. Torabi is a mom of two young children, ages six and three-and-a-half.
Spending more is a short-term solution.
We may feel better in the moment, when the packages arrive on our doorsteps and then we pile them, wrapped, under the Christmas tree. However, in the long run, the bills will still arrive and the holiday season will be over. Spending more alleviates guilt, only temporarily, but leaves us with an empty bank account (or credit card debt) that will only snowball into bigger (and worse) feelings in the future. The survey showed that holiday shopping will result in “nearly a quarter (22%) of Americans” carrying a credit card balance into next year. Don’t be one of them! We need to proactively approach the holidays.
Be honest with yourself about your finances.
The reality is that many Americans have faced drastic employment changes this year, including job loss, reduced hours, or furloughs. Because of this, many of us don’t have the same holiday budget this year, and that’s okay. We need to take a good look at what we can spend this year rather than spend and regret. It’s also important that we sock away an emergency fund rather than blow every spare cent on junk for our kids.
Call a family meeting.
Ms. Torabi says we need to “unapologetically scale back spending this year.” Have a meeting with your family and tell them what’s up. She suggests being straight-up with our kids, framing the conversation as a collective effort in which they are helping out the family by agreeing to a less-expensive holiday. She urges us to know that kids want to help out, and this is one way they can. Plus, many families are in the same boat this year.
Get creative with gift-giving.
Also, “let your relatives and close friends, those whom you traditionally exchange gifts with, know that you need to save and that you want to start the new year strong.” She suggests we propose a “gift grab” (draw names), and buy one gift for one person rather than a gift for each person. She adds, “Surely, you’re not the only one who wants to save. My guess is this suggestion will come as a relief to others.” Another idea is to “gift your skills.” Ms. Torabi says we can reflect on what we’re good at (photography, baking, teaching yoga, etc.) and offer those as gifts to others.
Launch new traditions.
It’s cliché but true. We can focus on experiences rather than “stuff.” Our family is concentrating on fun all December long, including baking a few of our favorite cookie recipes, having more family movie nights (hello, Jingle Jangle!) and game nights, and purging, organizing, and donating. Christmas doesn’t have to be a one-day, money-burning fest to be memorable and festive.
Become more financially savvy in 2021.
COVID-19 has thrown all of us for a serious loop, reminding us that financial stability is important. In order to begin the journey toward that stability, we have to be financially savvy, understanding how money, budgeting, and spending work.
The reality is that spending a lot of cash over the holidays isn’t going to compensate for the 2020 train wreck we call 2020. Just because we have Biden, Harris, and their team moving in to begin our redemption in January, we should expect to feel the financial impact of the virus for a long time. This holiday season can absolutely be merry and bright without racking up haunting debt.